Magma Announces Closing Of C$21.56 Million Placement To Finance Purchase Of Initial Stake In Icelandic Geothermal Company Hs Orka

10/22/2009

Vancouver, B.C., Canada, October 22, 2009 - Magma Energy Corp. (TSX:MXY) is pleased to announce completion of the private placement announced on October 15, 2009. Magma issued 11,652,639 common shares at a price of C$1.85 per common share for aggregate gross proceeds of approximately C$21.56 million and net proceeds of C$20.78 million (US$20 million). Magma's CEO, Ross Beaty, purchased 25% of the common shares issued pursuant to the private placement offering. All of the common shares issued pursuant to the offering are subject to a four-month hold period.

Proceeds of this financing will be used to finance Magma's purchase of an initial 8.62% interest in the Icelandic geothermal company HS Orka, as announced on July 23, 2009. The acquisition of Magma's further interest in HS Orka is expected to be completed in November.

About Magma Energy Corp.

Magma Energy Corp. is a geothermal power company which is actively engaged in operating, developing, exploring and acquiring geothermal energy projects. We currently have one operating power generation plant (the Soda Lake Operation in Nevada), and an extensive portfolio of exploration properties throughout the western United States, Chile, Argentina and Peru.

This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance and prospects for closing our acquisition of an interest in HS Orka. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.

A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information can be identified by terms such as plans, planned, anticipated, expects and is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about conditions to closing our acquisition of an interest in HS Orka being met and general economic conditions.

Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur.

There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances.

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